News

Just Say No to Cost-Plus Contracts

—June L. Kim2/26/2016

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​Sen. John McCain (R-Ariz.) said Thursday that he will staunchly oppose a cost-plus contract for the Long-Range Strike Bomber, despite the fact that the Air Force has already awarded Northop Grumman the bomber contract, and the Government Accountability Office has denied Boeing’s protest of the contract award. “I will not stand for cost-plus contracts,” he told reporters. Though the Air Force may argue that future technological uncertainty could lead to cost growth in development, thus making a cost-plus contract an industry necessity, his response to the bidders was simply, “Don’t bid on it. Don’t bid on it until you do know,” he said. McCain is the chairman of the Senate Armed Services Committee, which has the power to authorize—or not authorize—purchase of USAF’s next-generation bomber. McCain said it is “infuriating” that the Pentagon has continued to allow a cost-plus mindset over the years. “I will not stand for it on any weapon system,” he repeated. The military could learn from Silicon Valley, he said, since “the commercial side of America can [develop advanced products] without cost-plus contracts.”